You should be familiar with the following variables:

  P = AMOUNT TO BE FINANCED (present value)

  r = ADD-ON INTEREST RATE

  t = TIME (in years) TO REPAY THE LOAN

  I = AMOUNT OF INTEREST

  A = AMOUNT TO BE REPAID (future value)

  m = AMOUNT OF THE MONTHLY PAYMENT

  N = NUMBER OF PAYMENTS

  Installment Loan Formulas

AMOUNT OF INTEREST:                I = Prt

AMOUNT TO BE REPAID:              A = P + I or A = P(1 + rt)

NUMBER OF PAYMENTS:             N = 12t

AMOUNT OF EACH PAYMENT: m = A/N

APR Formula

The annual percentage rate, or APR, is the rate paid on a loan when that rate is based on the actual amount owed for the length of time that it is owed. It can be found for an add-on interest rate, r, with N payments made at equal time intervals by using the formula